New Tatu City Logistics Park to Drive SME Growth

A logistics park for Small and Medium Enterprises (SMEs) has opened at Tatu City in Ruiru, offering high-quality storage solutions for various products, including perishable goods.

The Link Warehousing and Logistics Park, a Sh2.5 billion joint venture between Tatu City, Chandaria Properties, Mahesh & Tirth Construction, and Steel Structures, is Kenya’s first SME warehousing and logistics park with Special Economic Zone (SEZ) benefits.

The facility has already attracted 10 companies that are operating there, including Novis PLC, a family-owned pasta production company, and Bakels East Africa, a Switzerland-based global specialist in baking ingredients and solutions.

The Link demonstrates the power of mixed-use Special Economic Zones to attract global and local investors while enhancing operational efficiency,” said Preston Mendenhall, Chief Operations Officer of Rendeavour, the owner and developer of Tatu City SEZ.

Mendenhall was speaking on Tuesday during the official launch of the construction of the second phase of the park, which is scheduled to be completed by December.

The first phase of The Link is sold out, and a waiting list is already in place.

This comes as Kenyan property developers prepare for a decade-long warehouse construction boom, driven by surging demand for prime logistics and storage spaces.

Earlier studies have predicted that the demand for industrial space in East Africa will, in the coming years, grow faster than in any other region in Africa – with Kenya driving the growth.

“By the first quarter of 2018, total demand in East Africa should surpass total demand in West Africa for the first time,” JLL said in its Africa Prime Industrial Report 2017.

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The demand for industrial space in Kenya is forecast to grow at 5.1% annually, which means logistics firms launching local operations will be competing for the available spaces.

“This should represent an excellent opportunity for growth and investment in the prime industrial sector,” JLL said.

Specialised warehouses – commonly known as Grade A warehouses – are the most sought-after industrial properties by multinationals setting up bases in Kenya.

“Quality warehouses remain scarce in the Kenyan market, and this presents developers with an opportunity to undertake warehousing projects,” Britam Asset Managers said in a past report, adding that infrastructure development is the main catalyst for the sector’s success.

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